Shares of Ascena Retail (ASNA) plunged in post-market trading after the company reported weaker-than-expected earnings for the fiscal fourth quarter and provided a downbeat outlook for fiscal 2017. Ascena offers clothing, shoes and accessories under the Ann Taylor, LOFT, Lane Bryant, Dress Barn, and Justice brands.
WHAT'S NEW: After the market close, Ascena Retail reported Q4 adjusted earnings per share of 8c on revenue of $1.81B, compared to consensus expectations for 16c and $1.77B, respectively. Excluding the ANN brand, which was acquired in the first quarter of fiscal 2016, total comparable sales at legacy Ascena brands were down 4% year-over-year, the company said. Looking ahead, Ascena guided for FY17 adjusted EPS in the range of 60c-65c on revenue of $6.9B-$7B, with comparable sales expected to fall 1%-2%. Analysts expect the company to report FY17 adjusted EPS of 83c on revenue of $7.17B.
MANAGEMENT COMMENTARY: Commenting on the results, Ascena Retail CEO David Jaffe said the company's "challenging" fiscal 2016 was characterized by a "highly competitive selling environment and significant store traffic headwinds." "While we are seeing good customer demand during peak periods, off-peak demand has been inconsistent, and fourth quarter financial performance fell well below our expectations," Jaffe added.
WHAT'S NOTABLE: In its previous earnings report, Ascena Retail also reported weak quarterly results and cut its guidance for fiscal 2016. At the time, Jaffe noted that, while the company's Q3 earnings achieved the upper end of its guidance range, the quarter's performance benefited from "some favorable expense timing" that offset softer than expected top-line performance. The CEO added at the time that he expected such expenses to come back in Q4.
PRICE ACTION: In after hours trading, Ascena Retail dropped 22.78% to $6.27.
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